April 15 is aloof about the bend — Monday, to be exact. For abounding people, it can be a time abounding with anxiety. Here’s how to handle six of the what-ifs best acceptable to accumulate you up at night.
What if I charge added time? Book an extension. It’s IRS anatomy 4868, and you can do it online. That gives you until Oct. 15 to book your federal assets taxes. If you don’t, a failure-to-file amends bliss in, which is 5% per ages of any taxes you owe.
But (yes, there is a “but”), it’s alone an addendum of time to accelerate in your paperwork, says Mark Steber, arch tax administrator at Jackson Hewitt Tax Service. If you’re accepting a refund, you don’t charge to worry. But if you owe or alike if you anticipate you ability owe, you’ll accept to do some number-crunching now, because 90% of your estimated tax accountability has to be paid by April 15.
Just demography a assumption isn’t absolutely a acceptable idea, Steber says. “You can guess, and abounding bodies do, but you accept to assumption in the IRS’s favor. You accept to overestimate, not underestimate.” If the IRS doesn’t get paid what you owe them by the 15th, a late-payment amends is applied. This is 1/2% per ages on your outstanding tax bill.
If you’re self-employed or in addition bearings area you pay estimated annual taxes, you could additionally get dinged with an added 1/2% per ages amends fee for underpaying those.
(MORE: The Hidden Amount of Tax Refunds)
What if I owe added than I can pay? The IRS has a few options for bodies who are afraid by a big-ticket tax bill. You accept to be pro-active, though. Reaching out to the IRS, alike if it’s to say, “Hey, I can’t pay you appropriate now,” is abundant bigger than cat-and-mouse for them to admit contact.
If you’re activity to charge added time, alpha an chapter plan. If your tax bill is beneath than $50,000, you can do this online. You’ll pay the aforementioned absorption and amends ante as bodies who get a concise extension, and there’s a ancient fee of $105 to set up the chapter plan ($52 if you accept your acquittal direct-debited out of your annual every month).
You can additionally pay with a acclaim card, but there are a brace of drawbacks to that. The absorption on your acclaim agenda is about absolutely college than what the IRS accuse beneath a acquittal plan, and there’s additionally a accessibility fee of almost 2% answerable by the companies the IRS uses as a agent to action acclaim agenda payments.
If you’re absolutely disturbing financially — say you declared defalcation aftermost year — accord the IRS a call. “If you accept a hardship, cotnact the IRS,” says Jackie Perlman, arch tax analysis analyst for the Tax Institute at H&R Block. “They’ve apparent alertness to assignment with people, but you accept to allocution to them.”
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What if I’m missing an important certificate like a W-2? First, try contacting your employer or the alignment that issued you the form. A lot of workplaces now accept systems for accessing W-2s online, so it ability not be too backward to alter that envelope the dog disconnected or your apron chucked in the recycling bin by mistake.
If you can’t get the certificate (for instance, if you formed for a aggregation that went bankrupt), IRS form 4852 acts as a proxy, absolution you ample out — to the best of your ability — what’s on that missing document. In the case of a W-2, your aftermost pay of the year should advice you appear up with a number.
If it’s too adamantine to estimate, Perlman says pay any added tax you apperceive you owe and book for an addendum until you can get addition archetype of the missing document.
What if I didn’t accumulate clue of my deductible purchases aftermost year? If you alive in a accompaniment area you abstract sales tax paid in lieu of assets tax, the IRS has accoutrement to advice accord you an estimate. Steber says best taxpayers, though, are bigger off aggravating to reconstruct the spending that would authorize for tax breaks, abnormally if you fabricated a condoning big-ticket acquirement aftermost year. Track bottomward receipts, acclaim agenda statements, or coffer statements. “The stronger the documentation, the better,” he says.
What if I already filed, but I forgot to accommodate something? You accept up to three years to alter your tax acknowledgment and add a deduction, Steber says. Use anatomy 1040X (the IRS goes into detail on its adapted acknowledgment advice folio here). The statute of limitations is three years, so April 15 is the aftermost day you can book an adapted acknowledgment for your 2009 taxes. Adapted allotment do booty best to action — Steber says apprehend to delay about six weeks, aback the IRS does attending at adapted allotment added closely.
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Steber says it’s a accepted burghal fable that filing an adapted acknowledgment will put you in the IRS’s cantankerous hairs for an audit, though. “In best cases, the adapted acknowledgment is allurement for money, and that’s the acumen for the added scrutiny,” he says.
What if I didn’t book taxes at all aftermost year — or best than that? If you didn’t book and are due a refund, you accept a three-year statute of limitations to affirmation that refund, Perlman says. If you haven’t done your taxes for years and you apperceive you’ll owe money, that’s a little trickier. In general, the IRS can go aback three years, Perlman says, but they can attending aback at what you fabricated and what you should accept been advantageous for six years if you underreported your assets by 25% or more.
Start by accomplishing this year’s taxes and advantageous annihilation you owe. After this year’s, alpha with the aboriginal year you didn’t pay and assignment your way forward, Perlman says. There could be article in one year’s acknowledgment that carries advanced to the subsequent year.
If the aftermost time you paid taxes was afore the iPhone was invented, Perlman suggests accepting advice from a tax pro to array through the blend and advice you reconstruct your banking records.
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